Brazilian Farm Market: an Opportunity for Investor

Piaui is strategically located near two ports and is close to major lo- cal markets providing significant economic advantage for exports and receiving inputs as infrastructure in the region continues to progress.

This particular region of Brazil is known for excellent weather, soils and topography. However, land prices in the area are still significantly lower than in more highly developed areas such as Mato Grosso. This suggests potential for land value appreciation as the region continues to develop agricultural infrastructure and more farmland goes into production.

Recently, Brazil has been rocked by social unrest and political scandal. Combined with relatively high interest rates and declining oil prices globally, Brazil has also been experiencing lackluster economic growth. Due to the current economic turmoil, potentially high-value assets and opportunities are underpriced given the steep depreciation of the Brazilian Real, particularly in terms of the US Dollar.

While the Brazilian government is cautious and protective about issues related to large scale foreign land ownership (i.e., land grabs by sovereign funds), it supports foreign investment aimed at improving production and infrastructure, especially in the new frontiers. The Brazilian government is committed to developing infrastructure in the emerging agricultural regions, particularly in the Northeast and strongly supports export oriented growth.

In the long term, Brazil will remain Latin America’s largest economy and a prime geography for business. There will undoubtedly be more discord to come, but investors should not underestimate the resilience of what often is referred to as the “country of the future” making now the time to invest in Brazil.